Throughout their existence, our nation's state parks have been challenged to serve a growing public while preserving each state's natural and cultural heritage. That challenge has been intensified in recent years due to shrinking general fund support. Several states have reciprocated with new support strategies including expanded user fees, concessioner contracts, and corporate sponsorships, while others continue to rely heavily on support from taxes.

The following report provides a sketch of 27 state parks systems between 1980 and 1994. It offers a brief look at the physical characteristics of each park system, its amenities and programs, visitation, fees and funding sources. This document is a companion to the PERC Policy Series: Back to the Future to Save Our Parks. The policy series examines the feasibility of creating self-sufficient parks, and includes specific policy recommendations.

Overview

Before examining individual state systems, it is useful to have a broad picture of the entire network. Total state park acres in the United States equals nearly 12 million acres and attracts over 750 million visitors a year. In 1994, the average state park system in the United States included 96 operating units which together covered nearly 234,000 acres. That same year the average system attracted over 15 million visitors, or five times more visitors than Yellowstone National Park. Between 1980 and 1994, the average state park system expanded modestly at an annual rate of 1.5 percent, while visitation increased by 2.2 percent annually (Table 1).

Table 1. Average State Park System

Year

1980

1994

Annual Rate of Change

Operating Park Units

86

96

0.8%

Acres

193,230

233,699

1.5%

Visits

11.4 million

15.0 million

2.2%

Total Budget

$38.3 million

$30.4 million

-1.5%

Ironically, increased visitation at state parks has not led to higher park financing in real terms. From 1980 to 1994, the average system's total budget declined at an inflation-adjusted annual rate of 1.5 percent (Table 1). Furthermore, general funding for those budgets declined by 3.6 percent annually (Table 2). Notably, all of the shortfall fell on the capital side of the ledger. New facilities, improvements and maintenance have all been delayed as capital spending, adjusted for inflation, declined at an annual rate of 4.8 percent (Table 2).

Table 2. Budget Breakdown and Financing

Year

1980

1994

Annual Rate of Change

Operating Budget

$17.9 million

$23.8 million

2.4%

Capital Budget

$20.4 million

$6.6 million

-4.8%

General Funds Financing

$24.7 million

$12.2 million

-3.6%

Revenues From Users

$6.7 million

$10.7 million

4.3%

Average Revenue per Visitor

$ 0.58

$ 0.71

1.6%

Dollar figures adjusted for inflation to 1994. Source: National Association of State Park Directors

Meanwhile spending on day-to-day operations increased by 2.4 percent a year (Table 2.). This increase in the operating budget was possible due to a 4.3 percent annual increase in revenues from users. In many park systems, new fees or modest fee hikes for entrance, camping, fishing, boating, special events and other activities generated the additional revenues.

These figures are evidence of a system-wide trend in state park systems. By looking closely at the actions taken by individual states and their parks in response to shrinking general tax support, we hope to generate ideas that can help resolve park financing problems at both the state and national level.

Texas State Parks

At over 500,000 acres, Texas State Parks is the fourth largest park system in the nation. Only the national park system, Alaska and California have more acreage. The system encompasses 41 state parks, 44 recreation areas, 40 historic sites, and 7 natural areas.

In 1991, the state legislature directed Texas Parks and Wildlife Department (TPWD), the agency which oversees state parks, to move toward self sufficiency. Underscoring this directive was the fact that appropriations from general funds for park operations would be eliminated by 1994. At the time, these appropriations made up half of the operating budget of the park system, and only a handful of park units were operationally self-sufficient. (Holliday 1995, 24).

With such a drastic funding reduction looming in the near future, park officials considered closing a number of parks, but local communities came to the rescue with a "partners in parks" program, which donated $1 million and many hours of volunteer labor. Immediate closures were avoided, but park officials knew that for the long haul they needed to embark on a dramatically different approach to park funding. That new approach was the entrepreneurial budgeting system, or EBS for short.

EBS is an innovative, incentive-based financing system that encourages and even challenges managers of individual parks to find new ways of raising revenue and saving money, while still protecting park amenities. At the heart of the EBS is the performance agreement. It is in essence a contract between the park manager and TPWD officials to meet certain goals. The park manager pledges to meet a spending goal for the upcoming year and raise revenue equal to the previous year's revenue plus a small increase of .5 to 3 percent. If a park manager spends less than the designated amount, department officials pledge to reward the manager by returning all the cost savings to the park's budget the following year in the form of an enhancement--not an offset to the park's budget. Before the EBS, there was little incentive to save money because of the so-called "use it or lose it" principle. If all the money from the yearly budget was not spent, it was a clear indication that the park did not really need all the money it had been appropriated. Hence next year's budget was reduced.

On the revenue side, if a park manager surpasses the revenue target stipulated in the performance agreement, then department officials pledge to return as much as 35 percent of the surplus as an enhancement to the park budget the following year. Importantly, the park manager is free to spend the money as he or she sees fit for park improvements. Of the remaining surplus, 25 percent goes into a seed fund that assists other parks initiate their own EBS, and 40 percent goes to park units that may never be self-supporting. In this way, the EBS creates a safety net for parks that are valued ecologically, but never attract a lot of visitors.

The EBS program introduced park managers to the type of business planning and risk taking, not commonly found in the public sector. For the first time, a park's budget could actually be reduced if the park manager failed to meet the spending and revenue goals set out in the performance agreement. Because of the new criteria set by EBS, park managers were given the option of participating. In 1994, the first full year of EBS operation, forty-two pilot parks entered the program. The following year, fifty-three more parks joined. Despite initial trepidations, park managers are assuming the risks and seeking the advantages offered through EBS.

One of the more obvious benefits under EBS is the freedom to create attractive and exciting new programs and services. For example, Brazos Bend State Park is offering a two-hour nocturnal journey into the world of owls. Dubbed "owl prowl," the program costs just $3 per prowler. For those who prefer to study life in the water, the park offers a gator gazing expedition on a pontoon boat for $8 a person.

At Big Bend Ranch State Park, visitors are helping park personnel with a cattle drive and paying for the pleasure. To protect the park's range from overgrazing, the resident herd of longhorns must be moved to new pasture twice a year. Participants sign up months in advance to help wrangle alongside park employees. They also pay $350 to $450 each. Other new revenue-generating services at Big Bend Ranch include a desert survival course for $350 per person and a wildlife bus tour to the interior of the park for $60 per person.

Visitors not wishing to participate in these more expensive programs, can still choose from a host of modestly priced activities, such as desert wilderness hiking, river fishing, and picnicking. The daily charge for these activities, including entrance fee, is $6.00 per person. Camping fees now vary according to demand and facilities, ranging from $4 to $10 at primitive sites and $10 to $16 at developed sites.

At South Llano River State Park, a 1951 Chevy bus, donated by the local fire department, has been refurbished to take visitors on wildlife safaris through the park. The charge is $3.00 per passenger. At Huntsville State Park, 50 and 100-mile "fun" runs, Rocky Raccoon Trail Runs and a canoe rendezvous raise $5,500 to $7,000 annually, says park superintendent Wilburn Cox.

Aside from programs and activities, park officials are exploring other opportunities to generate revenues. Park souvenir shops and a centralized reservation system have both been money makers. The new reservation system has been especially beneficial. Reservations can be made for both day and overnight facilities, and for some tours and activities. A deposit equal to one day's fee at the facility confirms the reservation. The system operators provide helpful information on park activities and opportunities, and direct visitors to under-utilized parks when campgrounds at the most popular parks are full. During the system's first six months of operation, 30 percent of the campers could not make reservations in their park of first choice, but with the help of the operators, they agreed to stay in an alternative park. The result has been more satisfied customers and more camping fees remaining in the parks. The reservation system is both a marketing and management tool, providing responsive public service, increased operations efficiency and enhanced revenues.

EBS has been a financial success. After just two years, the number of parks making more than they spend went from six to twenty-two. During that same time, the initial EBS parks raised $1.1 million in additional revenue and found $685,000 in cost savings (King 1995, 56). These funds have enabled park managers to carry out park improvements, provide additional support, and protect resources. For example, several parks purchased sand to create beaches near park waterways. Others planted trees and purchased better communication equipment for fire fighting. One park bought a shredder to maintain 2,500 acres of wildlife openings. Another fenced out white-tailed deer from areas that needed time to recover from heavy grazing.

To be sure, there are still bugs to be worked out in the new system. EBS payments to parks raising revenue above their target levels have run into problems. The payments come out of subsequent and not current year revenues. When Texas experienced a serious drought in 1996, visitation fell far below normal levels. As a result, there was not enough revenue to pay both operational expenses and EBS payments. This problem could have been easily avoided by setting aside funds from current year income to pay parks their rewards the following year.

While EBS has generated much needed new revenues, TPWD officials are still faced with trying to pare down a substantial repair backlog, estimated to be as high as $185 million. One of the most pressing problems involves modernizing outdated sewage and drinking water systems which pose potential health risks. Officials estimate that it will take $50 million to bring these systems up to snuff (Dawson 1996). To raise the needed capital, TPWD officials have turned to the park user.

In May, 1996, they replaced the $3 per vehicle entrance charge with per-person entrance fees of $1 to $5 at all parks. In addition, the annual pass to state parks was raised from $25 to $50. Officials expected that the new entrance fees would raise an additional $5 million to $7 million a year to fund park repair projects (Dawson 1996). Unfortunately, the summer drought led to a major downturn in visitation at Texas' "water parks," the most popular parks in the system. The parks' gross revenues did increase by 7 percent in May, 1996 compared to the same month in 1995, but fell 11 percent in July when the drought was at its peak (Dawson 1996). Officials anticipate that the full benefits of the new entrance fees will materialize once the drought ends.

In 1995, more than 64 million people visited California state parks, making it the most widely visited state park system in the nation. With 1.33 million acres of rugged coastal beaches, serene sandy bays, expansive deserts, majestic redwood forests, and giant sequoias among its abundant natural wonders, it rivals many of our national parks. Yet it too is suffering the same financial crisis that is afflicting parks across the country.

Shrinking general funds and a deferred maintenance backlog estimated at $75 million, however, have prompted park officials to search for ways to reduce operating costs and generate more revenue from park users. In 1996, the system's operating budget was a whopping $180 million, but still $45 million less than the system's operating budget in 1992. Much of the shrinkage was due to reduced general funding. Park receipts increased by $15 million over this same period, but the increase covered only one-third of the loss from general funds.

In 1996, the parks requested and received funding from the legislature to cover $15 million of the shortfall. Furthermore, the budget included another $16.4 million, which will be given to the parks annually for the next five years. This budget extension will allow the parks time to increase their revenue potential.

California's Department of Parks and Recreation has launched several efforts to reduce costs. For example, new partnerships with corporate sponsors and volunteer work projects have provided valuable "free" advertising and support services for parks. The Sempervirens Fund, founded in the early 1930s has continued to support California state parks. Soliciting funds from the public, foundations, corporate gifts and state matching grants, the group raised about $1.3 million in both 1992 and 1993. The California State Park Foundation has also raised funds for the parks, donating more than $87 million in 22 years for projects, educational materials and land acquisition. In addition, some park support services have been turned over to concessionaires to take advantage of higher efficiencies in the private sector. And a number of lightly visited units have been transferred to local or non-profit entities.

On the revenue side, it would seem that California's parks have obtained all they can from the user. In 1995, revenue from park fees totaled $58 million, most of which came from entrance fees ($26 million), camping fees ($19 million), and concession fees ($8 million). Prices remain reasonable at $5 per vehicle or $4 per walk-in for daily entrance, and $75 for an annual parks pass. Camping fees range from $8 to $14 for primitive sites and from $13 to $20 for developed sites. Concession fees average 7 to 8 percent of lodging and restaurant sales, and 5 to 15 percent of merchandise sales.

Still, there is an opportunity to generate more revenues from users by simply capturing more entrance fees. Only 30 percent of the 64 million-plus visitors actually paid entrance fees in 1994 (NASPD 1995). In addition, there are no charges for popular activities such as hiking, boating, and fishing. And while there are charges for about half the park special events, it seems reasonable that all events requiring personnel time and other support costs should be offset by event fees.

In July, 1996, the parks department instituted a promising new budget process based on incentives. It is designed to reward district park managers for generating greater revenues. It allows each park district to retain 100 percent of the revenues earned from its parks above a historical base and within authorized limits set by the department (not to exceed $63 million from all districts). Moreover, the money can be used at the discretion of the district thus giving district managers an incentive to act entrepreneurially. A portion of any revenues in excess of authorized limits are given to the district as a credit to the historical base for the following year. The remainder is used to replace declining general funds for all state parks. Any district falling short of the historical base will suffer an equivalent decrease in funding in the subsequent year. California parks are hoping this new incentive-based program will generate revenues sufficient to overcome the decline in general funding.

To further assist with revenue generation, California revamped it's Sacramento-based state park store in October 1995. Store merchandise promotes the programs offered by the department and offers exclusive California state park items. So far, the store has shown a modest and increasing profit. The parks division is exploring possibilities for expanding the park store concept to other park units.

Meanwhile, California parks have accumulated a deferred maintenance backlog of nearly $80 million. Historically, funds from bonds have assisted parks with upkeep and rehabilitation. In November 1996, a ballot measure for park capital funding was defeated. The last year an obligation bond was available for park funding was 1988. The parks continue to push for new bond funding to help reduce the growing maintenance backlog.

The Washington State Parks and Recreation Commission administers 123 developed state parks, some satellite properties, and approximately 20 sites held either for preservation or future park development. Together these areas constitute about 255,000 acres. Recreational and educational facilities abound in the system. For example, there are over 8,000 campsites and more than 13,000 picnic sites, 120 boat launches, 700 miles of trails, 10 environmental learning centers, 13 interpretive centers, and 17 historic sites. With so much to offer it is easy to see why the system is so popular among residents and nonresidents alike. In 1995, over 45 million people visited Washington's state parks, making them the fourth most highly visited among all state park systems in the nation.

The system derives most of its funding from general funds and just 15 percent of the operating budget comes from camping fees ($7.7 million in 1995). As of July 1995, all revenues have been deposited into a parks fund, but legislative approval is required for spending. Washington is one of only 10 state park systems that does not charge a day-use fee at any park.

Despite their tremendous popularity, Washington State Parks is experiencing serious problems. A report by the Washington State Parks and Recreation Commission (1994, 1-2) says the parks are "crumbling under the weight of recurring budget cuts, staff losses, and increasing public demands." In addition to a substantial decline in on-site staff, the commission's report notes that 30 parks, once open year round, have been closed seasonally; deferred maintenance projects now top $40 million; and there is an emerging shortage of available campsites during peak usage times.

The commission considered the possibility of a day-use fee as one way to provide the needed funding, but did not propose it fearing a public outcry. Generally, state residents cling to the notion that park access must remain free. This is unfortunate because down the coast, California State Parks, with nearly 20 million "fee area" visitors, generated nearly $27 million from entrance fees alone in 1995. The commission also assumed that campsite fees had reached reasonable levels. However, Washington's camping fees are less than those in California and several other western states.

The commission made several recommendations to increase park funding. Notably, it proposed keeping all user fees in an unappropriated fund thereby avoiding the legislative process. The commission also proposed increases in fees to concessionaires, river guides, and other commercial operations, as well as the establishment of more "friends of parks" groups to raise funds and donate volunteer work.

Taking its cue from Texas, the commission has also implemented a centralized reservation system (in coordination with Oregon) for campsites. This should increase attendance and revenue. To help with capital improvements, the 1996 legislature authorized a novel concept for raising funds for park improvements: the sale of certificates of participation to private investors. The state Treasurer recently sold 10-year certificates at 4.5 percent to 5.5 percent variable interest to private investors to raise $310,000 for improved lodging and campgrounds in Fort Warden State Park. Repayment of the bonds is made using revenues earned by the new facilities.(2)

As recommended by the commission, volunteer programs and friends groups have become more active recently. Furthermore, there is a desire within the park system to increase park revenues, according to program specialist Michael Anderson.

Washington's park managers still have a long ways to go in addressing current funding problems. Inhibiting efforts to generate greater revenue was passage of initiative 601, in 1994. This initiative limits fee increases and removes entrance fees as a viable option for raising revenues for parks.

Oregon's park system, 335 units and 90,000 acres, attracts 41 million visitors a year. Originally, the system was part of the Highway Department and roughly 90 percent of the financing for parks came from a gas highway tax.(3) In the early 1960s, revenues from recreational vehicle (RV) license plates became another important source of dedicated funds for parks.

Parks began to feel the financial pinch in the 1970s, as highway maintenance costs rose and money earmarked for parks from the gas highway tax was diverted to highway maintenance. The legislature compensated for the decline in dedicated tax money with money from general funds. In 1980, money for parks from the highway gas tax was eliminated altogether. The original intention was to replace this money with greater contributions from general funds. However, this support was not forthcoming. To make up for the lost funding from the gas highway tax, park user fees and license fees increased.

In 1995, only 13 percent of the budget was covered by general funds, while 46 percent came from user fees. Another 40 percent of the funding for operations continues to be RV license fees.

Of the system's 335 units, 24 charged an entrance fee of $3 per vehicle yielding $1.4 million revenue. Most of the revenue came from camping fees, which vary depending on service, location, and demand. The camping fee structure entails a minimum $7 fee for primitive sites and up to $20 for developed sites. Camping fees are among the highest of all state parks and no significant increases can be expected.

Years of dedicated funds may have lulled parks into complacency when it comes to controlling costs. Comparing 1980 to 1994, park acreage has held steady at roughly 90,000 acres, but the operating budget, adjusted for inflation, has jumped from $16 million to nearly $24 million. Central office staff has grown from two full-time people in 1980 to 66 in 1995. Park officials worry that without an increase in general funds, some parks will have to be closed and the maintenance backlog, estimated at $100 million, will continue to grow.

But it appears there is room to find significant cost savings internally without sacrificing service to visitors. The fact that all user fees must be reappropriated back to parks by the legislature, could also discourage park managers from seeking innovative ways to increase revenues. Additional money will have to be raised to reduce the huge maintenance backlog.

Idaho's park system has 27 active units encompassing nearly 42,000 acres. In 1995, an estimated 2.6 million people visited Idaho's state parks. The system includes 5,500-acre Heyburn State Park, which was established in 1908 making it one of the oldest state parks in the nation, and the first in the Pacific Northwest.

With some increase in fees, the park system has come to rely more on park receipts to finance operations. In 1980, there were no entrance fees. Camping fees were $3 per night for primitive sites and $4 to $6 for developed sites. Park receipts generated for the year totaled $716,300, equivalent to 23 percent of the operating budget. In the late 1980s, most units began charging an entrance fee of $2 per vehicle, and camping fees were raised to $7 for primitive sites and as high as $12 for developed sites. Walk-ins can still enter parks for free. In 1995, park receipts totaled $2.7 million, equivalent to 43 percent of the operating budget.

A new campsite reservation system has increased efficient use of the parks. Reservations can be made through a toll free number for most campsites in Idaho's state park system. The reservation fee is $5, and alternative sites are offered if the park of choice is booked, thus effectively disbursing visitation to the less utilized parks.

Still, there seems to be plenty of room for achieving higher returns from fees. In 1995, entrance fees totaled $349,867, representing just $0.19 per fee area visitor. According to officials at Idaho Department of Parks and Recreation, a fee increase may be in the offing in the near future. In addition, the department is looking for other ways to become more self-supporting. On the drawing board are plans to rent yurts and other gear to campers. Differential pricing is another option. Parks would charge higher entrance and camping fees during peak use periods.

While park receipts from entrance, camping, and concession fees go directly to a dedicated park fund, all monies from the fund must be appropriated to parks by the state legislature. This weakens the incentive for park officials to maximize receipts because they do not have complete control over the revenue raised in parks.

However, Idaho does run several in-park "enterprise operations," which generate revenues from visitors, but avoid the appropriation process. Four of these are marinas equipped with small stores and boating fuel, while another is a recreation area that rents trailer and camping sites and operates a small grocery store. All operations are supported out of the revenues that they generate. Some actually yield a small profit, which can be carried over to the following year. For instance, Heyburn Rocky Point marina with an operating budget of nearly $57,000 in 1996 showed a profit of more than $3,000. According to Stephen Anderson, the department's fiscal officer, "this becomes a good vehicle to provide services where direct revenues can be retained to cover direct costs."(4)

The department recently completed a ten-year acquisition, major maintenance and capital improvement plan, which would cost more than $76 million. At present, capital improvements are funded primarily from general tax monies and dedicated funds, but amount to only $1 to $2 million annually. Funds have yet to be earmarked for the department's 10-year plan.

Montana State Park System offers an unparalleled richness of the state's natural and cultural resources. Covering over 52,000 acres the park system receives 1.8 million visits annually. The system is divided into 312 fishing access sites, 41 parks, and 12 affiliated lands.

The 1995 operating budget was $4.5 million, a 50 percent increase over the 1980 budget adjusted for inflation. But the capital budget declined 50 percent from 1980 to 1995, dropping to $2.5 million and forcing a rise in deferred maintenance. It is estimated that annual maintenance costs for Bannock State Park alone reach upwards of $4 million. This park is the site of the territorial capital and includes many historic buildings.

The majority of Montana's state park bill is funded by dedicated taxes. In 1995, these taxes accounted for 71 percent of the budget, while revenues covered only 22 percent of total park operations. Still, it is an increase from 1980 when park revenues covered only 9 percent of the budget. Park revenues increased in 1989 with the introduction of user fees, but only 25 of the 41 park units collect entrance fees. All parks with existing campgrounds charge fees of $3 to $9 per night. Only 13 of the 312 fishing access sites charge any camping fee. Arnold Olson of the Parks Division, Montana Fish, Wildlife and Parks (MFWP), claims fishing access sites hurt camp revenues because nonresidents stay in these sites free of charge. In fact, only 15% of overnight campers in the system choose sites where fees are charged.

Montana state parks would like to increase revenue through higher user fees. Park entrance fees have not been increased since 1991. Presently, fees are standard throughout the state and are quite inexpensive--$15 per year for an annual pass or $3 per vehicle visit. Capital improvements have been minimally funded over the last 20 years, but the department is beginning to upgrade facilities. Still, the completion of this maintenance process is largely dependent upon dedicated taxes and general funds.

In addition to raising revenues, some costs have been reduced as a result of the return of some Bureau of Reclamation sites that were being run by the state parks. The state wanted the bureau to make improvements on the sites, while the bureau wanted the state to pay for them. The state simply did not renew the leases after expiration.

Two of Montana's state parks are unique to the budgeting system. These parks earn revenues greater than park operating expenses and keep a portion of revenues for future expenses. These parks link park management to fee generation and visitor services. Hence, the parks are more responsive to visitor needs.

The Smith River State Park is a 61-mile stretch of river down a remote canyon with incredible scenery and fantastic trout fishing. There are 27 boat camps with 53 sites from put-in to take-out. In the late 1980s, river recreation was becoming so popular that campsites were unable to support the large number of visitors during peak periods and the quality of the experience was diminishing. To control the number of floaters and maintain the resource Montana Fish Wildlife and Parks Department (MFWP) began charging a fee in 1991 of $15 per private floater launch up to 15 people and $175 per outfitter launch up to 15 floaters with additional outfitter fees of $15 per staff member and $65 per client per trip.

By 1993, the increasing demand for river access forced the parks department to limit the number of daily launches to nine. Launch dates are allocated by drawing. In 1996, gross revenues of near $100,000 were generated at a cost of $78,500 for staff and monitoring. A portion of these fees ($50 per outfitted client plus 10 percent of all other fees collected) is used for the Smith River Corridor account to help protect the infrastructure and to limit the impact of development in the river corridor. In 1996, these fees provided $23,000 to protect the Smith River.

Montana's first state park, Lewis and Clark Caverns, also receives unique treatment from MFWP. The park features one of the largest known limestone caverns in the Northwest. The park provides opportunities for hiking, caving, and camping. Picnic sites, cabins, and a food, beverage and gift concession are also available. Cave tours cost $7 for adults, recently increased from $5.50, and $3 per child. There is an additional entrance fee of $3 per vehicle. Campsites run $9 per site per night and cabins are available for $39 per night, $25 in the off-season. The park receives 75,000 visitors annually, 85 percent of whom tour the cave. User fees bring in nearly $370,000 annually with an operating budget of $250,000. The park budget is funded from earned revenues, general funds and dedicated taxes, proportioned as annually allocated by the legislature. Remaining revenues are returned to the state parks account.(6)

In total, Montana's state parks rely heavily on dedicated taxes. MFWP could learn from their own example in the Lewis and Clark Caverns and the Smith River state parks. Linking fee collections with park budgets has made management more responsive to visitor and resource needs. Increased fees and collections in more park units and a link between such fees and park management could assist Montana parks with additional funding for increased park facilities. This is a difficult move for MFWP. Present park facilities are primitive and park personnel feel many park structures are inadequate to warrant increased user fees without proper upgrade and innovation.

Wyoming's state park system includes 53 units encompassing 120,000 acres. The system must compete with nearby Yellowstone National Park, but it still manages to attract a little over 2 million visitors a year.

Wyoming parks have a long history of being heavily subsidized. In 1995, park fees totaled $427,129, equivalent to only 11 percent of the parks' operating budget. While entrance, camping, and concession fees are charged, these fees are sent directly to the state's general fund, thereby eliminating any motivation for park managers to maximize revenues from user fees.

The $2 per vehicle day-use entrance fee is in line with other state park systems, yet only six out of the 53 units actually charge the fee. In 1995, the park system captured entrance fees from less than a third of the park users. The camping fee is fixed by the legislature at $4 per night, regardless of demand, and is the lowest in the nation. Private concession fees range from one to two percent of gross sales and are also among the lowest in the nation.

Support for higher fees and a dedicated park fund has taken on increased importance in the last few years. State Parks and Historic Sites Director Garry Thorson supports higher fees because he foresees general funding stagnating while costs rise. A bill was recently debated in the legislature that would have increased the current low camping fee to $7 per night, $8 for non-residents and implemented a day use fee of $2 per vehicle at most parks. Importantly, 80 percent of these fees would go to a new enterprise fund dedicated to funding park maintenance. The bill was defeated despite support from the park agency and park advocacy groups. Wyoming State Parks are being squeezed because the legislature won't appropriate any additional general fund money nor allow them the freedom to generate new revenues.

Thorson is also planning to bring concession lease fees up to fair market value, which does not require legislative action. Although user fees cover only 11 percent of the operating budget now, the governor has made a statement indicating the parks should strive for 30 percent. Whether this can be accomplished with the legislature completely controlling fees and with no dedicated park fund remains to be seen.

At 3.2 million acres, Alaska has the largest state park system in the United States--over two and a half times the size of the second largest system, California State Parks. Alaska also has the single largest state park, Wood-Tikchik State Park. Created in 1978, this 1.6 million-acre park provides critical breeding habitat for Alaska's fish and wildlife, including all five species of Pacific salmon. The management philosophy at Wood-Tikchik and other Alaska parks with natural amenities is one of minimal development and maintenance of each park's special "wilderness" character. In 1995, 4.3 million visitors enjoyed Alaska's 124-unit park system.

Prior to 1988 use of Alaska's state parks had been free. State park operations were supported out of general funds and taxes on resource development, such as oil and gas.(7) In 1988, a substantial reduction in general funds led to the establishment of fees for day-use parking, cabin rentals, camping, and boat launches. In 1995, day-use parking cost $3 per vehicle, cabin rentals were $25 a day, camping fees ranged from $6 to $15, and boat launches ranged from $3 to $5 a day. In addition, annual passes for camping, parking, and boat launches were $75 ($100 nonresident), $25, and $50 respectively. A combination of all three passes cost $135 for Alaska residents.

Park funding has also been secured through commercial use permits. Such permits are required for businesses and individuals that use parks for commercial gain, such as outfitters and film studios, but do not require permanent park structures. Permits are sold on a non-competitive basis for an established rate when there is no limitation on the number of operators. When the state limits the number of operators, competitive bidding for the permits is invoked. Alaska earned $328,000 from commercial permits in 1993, representing 28 percent of the total fee revenues from the parks. (Washington State parks, 1994, 33). Total park revenues have enabled the park system to finance 30 percent of its operating budget. Prudhoe Bay oil taxes provide funds for the remainder.

The park service also uses friends groups and partners to raise funds. The Alaska State Parks Foundation supports the parks and specific projects through grants, membership fees and donations.

Parks director Jim Stratton would like to finance 60 to 70 percent of the system's operating budget out of fees, but he sees two problems standing in the way. First, the legislature predicts what the parks will earn each year, and any income above that amount is lost to the state treasury. Consequently, there is little incentive for park personnel to try and increase revenue beyond the legislature's prediction. Second, when parks earn more income than predicted, they automatically lose that amount in general funding the following year giving park personnel a disincentive to raise revenue. On the capital side, funding is very tight, and the deferred maintenance backlog, currently estimated at $20 million, is rising with no obvious solution in the near future.

Nevada's 24 unit, 148,578-acre system with nearly 3 million annual visitors has minimal visitor services including only ten areas with developed campsites and nine with primitive sites. While in the past Nevada has been dependent primarily on general funds and dedicated taxes, it is trying to move toward greater self-sufficiency.(8) The percentage of the operating budget covered by user fees has increased from 17 percent in 1994 to 22 percent in 1996, and is up from 12 percent since 1980.

The parks are working toward a tentative goal of 34 percent self-sufficiency, which they will attempt to reach by increasing fees and bringing concession lease contracts up to fair market value. Many facilities are park run, but those contracted out receive a return of 3 to 9 percent of gross revenues. Park's Administrator, Wayne Perock, feels that limited park amenities cannot generate substantially increased revenues. Yet he also knows the benefits of shifting away from general funding. As he puts it; "I find as an administrator, the more I move away from general funds, the more flexibility I have".

In recent years some revenue increases have resulted from a restructuring of the fee system to reflect market value. Entrance fees of $3 per vehicle are charged at 19 of the 24 units. Campsites range from $3 to $7, but these fees are paid by the honor system with under 20 percent compliance in some areas. Park managers are looking at ways to automate fee collections in the future.

All revenues generated remain with the agency becoming a part of the budget but increases result in the loss of general funds. Dedicated taxes comprise 24 percent of the budget, and revenues 22 percent, while general funds cover the rest. In addition, there is a $.50 surcharge on all entrance fees that remains in the park where collected for maintenance of utility systems. Even so, the parks infrastructure follows the national trend-- Nevada parks have a $30 million backlog.

Due to lack of funds park administrators are finding it difficult to increase services and thereby raise revenues. However, more efficient fee collection in the parks that already collect fees, should be able to more than double present entrance fee revenues.

Utah State Parks and Recreation Department encompasses 47 units that cover 97,000 acres and host nearly 7 million visitors annually. An abundance of recreation opportunities are available at these heritage, scenic and recreation parks.

Although the goal of the park system is to become 40 percent self sufficient in the next five years, revenues covered only 28 percent of park operations in 1995, compared to 24 percent in 1981.(9) Deputy Director Dave Morrow feels that 50 percent is possible. This year alone, the parks have been asked to raise $900,000 more than they did last year. Fortunately, they have been given some freedom to do so. The park board, not the legislature, establishes fee levels, so the process of raising fees is somewhat expedited. The park system also gets to keep up to 125 percent of generated income from an estimated revenue base. So, up to a certain extent, there is no fear of losing any additional revenue they generate. But funds not spent during the existing year are lost to the General Treasury.

Entrance fees are charged at nearly all parks ranging from $3 to $6 per vehicle. An annual permit can be purchased for $60 allowing cardholder and up to seven guests in the same vehicle entrance into all state parks. A five day pass is available to all parks for $12 or annual single park permits are available from $30 to $50 depending on the park.

The park service runs a central reservation service for all campsites. A non-refundable $5 reservations fee is charged in addition to the nightly fee. Campsites are available at most parks at a cost of $5 to $8 for primitive sites or $9 to $15 for developed sites.

Park facilities are run both by private concessionaires and by the park service. Those contracted out are in an effort to contain costs rather than raise revenues. Concession contracts are charged a fee of 2 to 10 percent of gross sales, generating only 3 percent of total park revenues. In 1988, the park system took over management of several of its own golf courses, which had previously been contracted to private interests. These have become profit centers for the parks making nearly $1 million in revenues in 1995, compared to $300,000 before the take-over. Green fees range from $8 for nine-hole and $19 for 18-holes except on the Jordan River nine-hole, par-three course that costs $4.50 on weekdays and $5.50 on weekends and holidays.

On the capital side, however, there is not so much optimism. An approximately $20 million maintenance backlog exists that according to Morrow will severely restrict the parks' ability to reach that 40 percent goal. He is afraid that visitors will have no interest in paying to visit poor facilities. Recognizing the need for additional funding, the Utah state parks have looked to friends groups to help renovate existing structures and build new ones. Donations of over $8 million were received, including more than $1 million of in-kind donations of time, materials, and expertise.

Colorado State Parks manage 41 state parks covering 206,000 acres, 131,109 acres of natural areas and 935 miles of trails accommodating nearly 11 million visitors in 1995. The state parks capture all aspects of Colorado's great outdoors including mountain lakes, pristine forests, steep-walled canyons, lazy blue reservoirs, forested campgrounds and roaring waterfalls. Camping, fishing, hiking and water sports are some of the many activities available in the Colorado park system. Most parks are open year-round offering an additional variety of winter activities.

Colorado parks have been over 50 percent self-sufficient since 1980. Entrance fees of $3 per vehicle in all state parks provide the largest portion of revenues. A $30 annual pass is available and a $10 Aspen Leaf pass can be purchased annually by senior citizens allowing free park entry and free week day camping. Revenues are also generated from camping fees of $7 to $12 per night per site for developed sites and $6 to $7 for primitive sites. A centralized reservation service has enhanced camp revenues and improved the utilization of low demand parks during peak season. Park facilities are contracted to concessionaires at a minimum 5 percent of gross revenue. They bring in less than 10 percent of total park revenues.

Because revenues are returned to the parks, there is incentive to maximize revenues. However, legislative approval is required for all park spending and individual park units are not rewarded for revenue generation. For example, Colorado's State Forest State Park,the system's largest park, has the smallest park budget, even though the park generated income of $14,000 in excess of its allocated budget. The park has requested an additional full-time staff member to join the staff of two who manage the 70,000 acre park and funding to upgrade the 20-plus-year-old structures. The requests have been denied, although the park has received funding for a new visitor center.(10)

On the capital side, Colorado has set aside funds for park maintenance. Ten percent of the state's lottery income is designated for state park land acquisition, development, and trails projects. This provides dedicated, non-appropriated park funds of $15 million annually. The Great Outdoors Colorado Trust Fund (GOCO) provides additional park maintenance monies. One-half for the state's lottery income is dedicated to the GOCO fund, with 25 percent of this allotted to parks. This capital budget has prevented a large backlog of maintenance needs in the parks from accruing.

New Mexico State Parks and Recreation Division manages 120,000 acres of parklands hosting 4.6 million visitors. The 35 unit system offers diverse recreational opportunities in its lake, mountain, desert and historic parks. Just over 25 percent of park operating costs are covered by park revenues. This share has remained constant over the past 15 years. Park revenues are deposited into the state parks account for budget use the following year with legislative approval. The stability of general funding in the past has left little incentive for fee generation within the parks. And, according to Allen Roybal, Administrative Bureau Chief of New Mexico State Parks, " I don't anticipate any reduction, nor any great increases in parks general funding".(11)

Even though all park units charge entry fees of $3 per vehicle per day or $30 for an annual pass, in 1995 entry fees generated only $868,346. Some parks collect fees at entrance stations but many have self-pay "honor" stations. Though never formally studied, these self-pay stations obviously have a low rate of compliance. Efficient year round fee collection could conservatively generate at least $3.5 million annually.(12) This alone would bring revenues close to 30 percent of operations, more than total current receipts.

Other than a $25 million maintenance backlog, which is being slowly dealt with through bonds, the parks are not in dire circumstances, and Roybal says he doesn't foresee any significant changes in the near future.

Established in 1957, the Arizona State Park System is the youngest in the lower 48 states. Its 43,000 acres is divided among 24 natural, historical, and recreational parks currently open to the public. In 1995, over 2 million people visited Arizona's parks. Red Rock State Park is just one of several specializing in natural amenities and environmental education for school groups and private groups. To protect its 286 acres of fragile vegetation visitors are directed to stay on trails, pack out any trash, and leave pets at home. Swimming and wading are reserved for wildlife. Two parks are currently under development. Kartchner Caverns is reportedly one of the most spectacular underground caves in the world and Sonoita Creek Natural Area contains unique riparian habitat as well as habitat for endangered species. The state is currently developing hiking trails and wildlife viewing areas at the 5,000-acre Sonoita Creek.

Arizona State Parks increased their annual receipts from $1.5 million in 1988 to $4.1 million in 1996. This 173 percent increase can be attributed in large part to the establishment of a dedicated fund for parks to receive all park receipts, according to Leslie Schwalbe, assistant director of administrative services. Prior to 1988, all park receipts were deposited in the state treasury. "We now have an incentive to bring more money into the system," Schwalbe says.

Importantly, the rise in park receipts has not resulted in a reduction of general funds to parks as has happened in other states. Arizona Park managers view park fees as an enhancement mechanism, not an offset to general funding, and have implemented a vigorous marketing program. Entrance fees have increased from $1 per vehicle in 1980 to $3 to $5 in 1995, while campsite fees have risen from $2 to $5 in 1980 to $8 to$15 in 1995. In addition, camping fees are higher in popular areas, and for weekend and holiday use. The distributions from the park fund are split equally between the operating budget and the capital budget. Kartchner Caverns State Park has been a recent beneficiary of the capital budget's share. The Arizona State Park System has a deferred maintenance backlog estimated at $50 to $60 million. To address this backlog, a park renovation program began in the early 1990s, averaging $5 million to $6 million a year. About two-thirds of the park renovation fund comes from dedicated sources, the remaining third from park receipts.

Although Arizona has made enormous progress in generating revenues, still more opportunities exist by expanding fees for special services and activities. Currently, there are only two major sources of revenue from parks: entrance fees and camping fees. There are no fees for education programs and special use activities such as hiking, fishing, birdwatching, and boating. Such fees could generate more revenue, as Texas State Parks has proven.

At 19,900 acres, the North Dakota park system is small in comparison to other park systems, but it still attracts over 1 million visitors a year. The system contains 11 state parks, 8 recreation areas, 7 natural areas and 4 historic areas. The largest park is Little Missouri State Park, which covers nearly 6,000 acres and offers a wilderness experience in the picturesque North Dakota Badlands. Numerous wildlife species, including mule deer, coyote, fox, bobcat and golden eagle can be seen in the park. Horse rentals and guide services are available for those wishing to explore the park's extensive system of hiking and horse trails. All developed and maintained state parks charge entrance and special use fees year-round.

Like many other state parks, North Dakota has experienced cuts in general funds and fee increases since 1980. Entrance fees have increased from $1 to $3 per vehicle, annual passes have increased from $7 to $15 per adult, and camping fees have increased from $3 to $8 for primitive sites and from $5 to $10 for developed sites. From 1980 to 1995, annual allocations from general funds declined 35 percent, but annual park receipts more than doubled, with camping fees making the largest contribution. In 1994, fee revenues represented nearly 40 percent of the operating budget compared to just 11 percent in 1980.

Revenue from fees goes to a park fund, but must be appropriated back to parks by the legislature. In addition, all fee increases must be approved by the legislature and it is expected that fees will remain at the same level for the foreseeable future.

Both operating and capital budgets for park system have been cut modestly for the last three bienniums, according Dorothy Streyle, park system business manager.(13) The cut from 1995-97 was 6.3 percent, and the cut for the recent 1997-99 budget was 3 percent. Thus far, no staff reductions or park closures have resulted from the cuts. Some of the larger parks utilize "volunteers in parks" to maintain activities and needs that cannot be met otherwise. The estimated maintenance backlog entails no new construction, only repairs, and ranges from $500,000 to $2 million.

South Dakota's park system with 77 units, 92,700 acres, and 7.7 million annual visitors annually is also striving to become self-supporting.(14) In 1980, park receipts totaled $1.3 million, equivalent to 44 percent of the operating budget for parks. By 1995, park receipts totaled 5.9 million, equivalent to 82 percent of the park system's operating budget. According to Supervisor of Visitor Services, Marty Dewitt, South Dakota Parks are moving toward more of a user pay system.

The entrance fee structure has changed from $2 per vehicle in the early 1980s to the current $2 per person. Camping fees have risen from $4 to $5 a night for developed sites in 1980 to the current rate of $7 to $11 a night. Future plans call for setting higher fees for preferred campsites. In addition, there are new revenue programs, including RV rentals, tent and tepee villages, and state park stores.

A reservation system for campsites was set up in 1995. Non-resident campers must pay a $5 non-refundable reservation fee. The fee is waived for South Dakota residents. Full payment for the entire stay must be paid in advance.

Park receipts are dedicated to operation and maintenance support, and are annually appropriated by the parks commission rather than the legislature. The Division of Parks and Recreation is undergoing reorganization and functional changes in order to cut costs. The park system has a deferred maintenance backlog of $15 million, and growing. No funds have been appropriated to address these maintenance needs in the last two years.

Because of its size, South Dakota's 73,000-acres Custer State Park has its own division, separate from the Division of Parks and Recreation. The Division of Custer State Park is self supporting in its operations. The park charges a $3 per person entry fee or $8 per vehicle. All revenues earned by the park are put into a revolving fund held exclusively for Custer State Park. Annual appropriations are returned to the park via legislative approval, but the park generally receives what is requested and any additional funds are maintained in the fund, with interest, for Custer State Park.

The Oklahoma State Park System contains 56 units which cover about 72,000 acres. In 1995, over 15.5 million people visited the system. Robbers Cave State Park and Arrowhead State Park exemplify the amenities available. Robbers Cave enjoys notoriety as being one of the former hideouts of Jesse James and Belle Starr. It includes three small lakes as well as 8,246 acres complete with 26 cabins (with fireplaces), five camping areas (117 campsites), a nature center, an amphitheater, the 12-mile Robbers Cave Hiking Trail, a grocery and cafe and a gift shop. Arrowhead encompasses 2,202 acres plus 102,500-acre Lake Eufaula which offers fishing, boating, and swimming. Other amenities include 214 campsites, a horse stable, and the 3-mile Outlaw Trail.

Oklahoma charges no park entrance or activity fees, yet in 1994 the parks generated $18 million, accounting for 58 percent of the system's operational budget. Revenues come from fees and rentals for RV sites, cabins, campsites, lodges, marina use, nine off-site golf courses, as well as concessions. Concession leases return an average of 5 to 10 percent of gross sales to the parks. In addition, some parks earn oil and gas royalties. Partnerships, and volunteers are being used to keep costs down.

Recent budget cuts forced a reduction in full-time staff, while the Oklahoma Parks Commission attempted to raise revenues with a state-wide increase in camping utility fees for electricity, water and sewer hook-ups. Fees are standard at the state parks, but vary to reflect available amenities and seasonal demand. Campsites range from $6 to $13 with an additional utility fee of $3 and $4, shoulder and peak season respectively. Disabled persons and senior citizens receive a 50 percent discount on site rates, but there is no discount on utility fees.

Oklahoma State Parks benefit from direct access to park-generated-revenue without going through appropriations. On the negative side, however, general fund allocations to the parks automatically go down as park revenues go up. This financing structure effectively eliminates the incentive for park personnel to find additional revenue sources, such as entrance fees. Capital improvements are funded mostly from bonds, however, the Oklahoma state park system struggles with a substantial backlog of facility maintenance needs, currently estimated at $100 million.

Nebraska State Parks cover 134,000 acres divided among 87 units, which attract roughly 9 million visitors a year. In the face of stagnating general fund support, this park system has managed to increase park funding. Revenue from fees has increased more than sixfold to over $10 million, while general fund support has hovered between $3 and $4.5 million a year during the same period. In the early 1980s, general funds provided 70 percent of the operating budget, but more recently revenues from fees have covered 95 percent of the operating costs.

The parks have raised revenue from users through new fee-based services, fee hikes and the introduction of entrance fees for all of the system's 86 operating units. In 1980, only 42 percent of the total number of visitors to Nebraska State Parks paid entrance fees. In 1994, all visitors to the system paid entrance fees. Entrance fees at Nebraska parks include a per-vehicle charge of $2.50 or an annual park pass of $14 (seniors free). Camping fees range from free to $7 for primitive sites and $6 to $13 for developed sites. Special activities include horse trail rides for $10, jeep rides for $6 ($4 for children), hay rides for $2, hay ride breakfasts for $7, and a buffalo stew hoedown for $6 ($4 for children). In addition, the park agency runs its own restaurants and lodging facilities, which contributed over $3.5 million in 1995, or 34 percent of total revenues. The donation of private land and capital has also helped the system make significant strides in raising revenue.

All receipts collected in the parks are held in a trust fund earmarked for park use only. Hence, park managers know that by collecting fees they have a reliable source of funds. However, as the cash balance rises, currently at $7.2 million, park administrators worry about the fund being raided for non-park uses. Even so, the system has an accumulated backlog of capital maintenance of $1 million. The attempt to diminish this is an ongoing process. According to Nebraska Parks Administrative Assistant, Dorothy Porath, they are always trying to catch up. The parks have been unsuccessful in attempts to have a legislated deferred maintenance program.

The Kansas state park system provides some interesting contrasts with that of neighboring Nebraska. At 324,000 acres in 146 units, it is more than twice the size of Nebraska's system. The state legislature strictly controls all funding for the parks, including park receipts, and has recently imposed some major budget cuts. The number of permanent park employees was reduced, resulting in an increase in contract and seasonal labor, and a decrease in mowing, cleaning, equipment purchases and maintenance.

Another problem has been entrance fees. In 1994, Kansas had 83 percent as many visitors as Nebraska and collected entrance fees that were only 40 percent of those collected by its neighbor. Attendance at "fee areas" represented only 54 percent of the total number of visits at Kansas State Parks compared to 100 percent at Nebraska parks. The legislature's tight control of park receipts may partially explain why the parks have not been more aggressive about fee collection.

In addition, Kansas has not been able to respond to its park maintenance needs as effectively as Nebraska. In 1994, Kansas State Parks had an estimated backlog totaling $15 million compared to $1 million at Nebraska State Parks.

A further blow came in 1995 when dedicated funds from license plate revenues were eliminated. These funds had accounted for 31 percent of operations in 1994. Presently, revenues cover about 40 percent of the park system's operating budget. However, it is expected though not yet finalized, that general funds will decrease substantially and zero out by the year 2000.

To survive in this budget climate, Kansas State Parks has implemented a variety of money-saving projects. Staff reductions and early closures have saved some funds. Pick-up trucks for basic maintenance and hauling have been replaced with much cheaper golf carts. Self-pay "honor" stations have been added at some areas and their use may be expanded. Longer stays at discounted rates, special events, grants, volunteers, and park friends groups have all played a part in reducing costs and raising revenues.

The legislature would like the state park system to earn a larger share of its budget, and park officials are looking to other states for new ideas on how to become more self-sufficient. A dedicated park fund such as the one in Nebraska would help, or better yet, a program like the one in Texas would provide stronger incentives for revenue generation.

Founded in 1916, Indiana State Parks has 23 units encompassing about 59,000 acres with nearly 11 million visitors a year. Richard Lieber, the so-called father of the Indiana park system believed that parks should fund themselves as much as possible out of user fees (Tilden, 1962, 23).(16) During his tenure, Indiana's parks funded most of their expenses out of per-person admission fees. But after World War II, state park managers, including Indiana's, began to rely more and more on taxpayer support. In the early 1980s, over 50 percent of the operating budget for Indiana parks came from general funds.

In recent years, however, Indiana's park managers have re-dedicated themselves to relying more on user fees for support of park operations. From 1980 to 1995, the parks' operating budget more than doubled to $13.5 million, primarily the result of higher revenue from fees. In 1995, revenue totaled $9.8 million, or 73 percent of the operating budget. More visitors to parks and higher park fees were the contributing factors. Visitation grew by about 3 million over this period. Day-use entrance fees and the annual parks pass increased from $1.25 to $2 and from $10 to $18, respectively. Camping fees increased from $4 to as high as $11 for developed sites, and from $3 to $7 for primitive sites.

All revenue raised from park fees goes into a special fund dedicated to park operations, thereby providing park managers an incentive to raise revenue, but such revenues must be reappropriated by the legislature. Like most state park systems today, there is still not an adequate funding mechanism in place to ensure stable capital funds (Table 11.). Currently the capital budget is provided from general funding and cigarette tax revenues.

Michigan State Parks attract nearly 24 million visitors a year. There are 96 state parks to choose from, encompassing 265,000 acres. Natural amenities abound in the park system, including scenic inland waterways, freshwater coastal sand dunes, old growth forests, wilderness peaks, and Great Lakes shoreline. One of the parks, Mackinac Island State Park, has the distinction of being America's second national park, established in 1875 (after Yellowstone). Mackinac became Michigan's first state park in 1895, following action by Congress which transferred Mackinac National Park to the state.

Michigan's state park system has undergone a dramatic change in financing in recent years. In 1980, the general funds allocated to the parks totaled $8.8 million, accounting for 56 percent of the division's operating budget. In 1994, general funds totaled $7.2 million, accounting for less than 25 percent of the division's operating budget.(17)Annual park receipts have more than offset declining general funds. In 1980, receipts totaled $9.1 million, accounting for 58 percent of the operating budget. In 1994, receipts totaled $23.9 million, or 78 percent of the operating budget.

The rise in park receipts came about mostly through fee hikes with park entrance fees increasing from $2 to $4 per vehicle, annual park passes increasing from $7 to $20 per adult. The annual park pass or a daily permit are required for entry into all Michigan state parks. Camping fees increased from $2 to $6 for primitive campsites and from $6 to as high as $16 for developed campsites.Reservations can be made for all state park campsites for a $5 reservation fee.

The legislature controls spending for parks, including spending from park receipts, with one very important exception. A portion of the proceeds from park fees and some seed money from general funds are now being allocated to a voter-approved park endowment fund. This fund will collect $10 million in state mineral, oil and gas revenues annually as well as a portion of the proceeds from park fees and seed money from general funds until it reaches a total of $800 million. In addition, the park division is hoping that the legislature will put an additional $40 million into the fund if a plan to privatize the workers' compensation program goes through thereby freeing up some general funds. The endowment fund will automatically provide $5 million to the annual operating budget for parks until it starts earning more in interest. Presumably, parks will then get the full amount of interest earned annually.

Michigan's park division believes it now has an adequate safeguard against further reductions in general funds support of parks. While it has a sizable deferred maintenance backlog, estimated between $200 million to $400 million, the park division is in the process of determining how to address this backlog.

Alabama's 24 unit, 49,700 acre park system attracts over 6 million visitors a year. In 1988, the park system took over the management of highly profitable state-owned resorts and golf courses. Park operating expenditures more than doubled after the take-over but revenues more than tripled. Park entrance fees have also risen from $.25 per person in 1980 to $.75 per person in 1995, and camping fees have increased from $2 for primitive sites to as much as $8, while developed sites that had a $8.50 maximum price in 1980 now reach as high as $25. Fees are collected from 64 percent of park visitors compared to only 41 percent in 1980. As a result, the park system as a whole is about 85 percent self-supporting in terms of operations.(18) Friends groups, corporate partnerships, and volunteers have also provided money-saving services to the parks.

Park revenues must pass through the budget process which requires legislative approval but all park receipts are earmarked for parks in a revolving fund and can be spent at the discretion of Alabama parks after budgeting.

While the parks are able to finance most of their own operations, general funds were eliminated in the 1995/96 budget and prospects for future general fund appropriations are uncertain. Park Director Gary Leach must still cope with a $50 million deferred maintenance backlog. Unless addressed, he fears that the deteriorating facilities will detract from the quality of the park experience, thereby attracting fewer visitors and generating lower revenues.

South Carolina's 56 unit, 82 million acre system is host to over 10 million visitors annually. Chief of Park Operations Freddie Parkman attributes the demand to the amenities offered by the parks.(19) The parks provide nearly 3,000 campsites, 155 cabins, four restaurants, three golf courses, three marinas, five pools and two stables.

Over the years general funds have contributed just over 30 percent of the parks' operating budget with park revenues making up the remainder. All park receipts are returned directly to the parks operating budget without legislative appropriation.

From 1980 to 1995, the operating budget increased 50 percent above inflation, but general funds have also continued to rise above the rate of inflation. However, park revenues made up the bulk of the increase in the operating budget. The park runs its own facilities which make up nearly 56 percent of the revenues. Entrance fees are charged at only 15 of the 56 park units bringing in only 9 percent of 1995 park revenues.

Capital expenditures, on the other hand, have declined 38 percent creating a maintenance backlog for the parks just shy of $30 million. Usually addressed through bond referendum it has been years since the park capital fund has received new money.

South Carolina's state parks have had stable operating funds over the years with the ability for the system to use its own receipts and general funds making up any difference in the budget. Increased incentive for revenue generation could enable the system to be operationally self-sufficient, but the capital side continues to stand in dire need.

Kentucky State Park System covers nearly 43 million acres in 47 units and receives nearly 30 million visitors annually. The system maintains 16 resort parks with lodges, golf courses, dining rooms and gift shops. Fourteen also have cottages. All of these facilities are park run as profit centers for the park system.

The operating budget is made up of park revenues subsidized by general funds for any shortfall. Kentucky state parks have brought in at least 60 percent of operating expenditures since 1980.(20) In the early 1980s half of the operating budget was comprised of dedicated funds. Dedicated funding has since been eliminated from the park budget.

Kentucky State Parks charge no entry fees, the bulk of revenues come from accommodations and other park run facilities. While all revenues generated in the parks are returned to the park system for reallocation, the balance of the budget is offset by general funds. Unless general fund support is threatened, the incentive to further raise revenues is minimal.

A portion of user fees go toward renovation and capital maintenance but with just over $2 million in the fund the parks have a long way to go to take care of the $30 million maintenance backlog.

Historically, Arkansas' park system was financed by general funds at about 50 percent and park generated funds at 40 percent, with federal funds making up the balance. By 1995, park revenues had expanded to cover almost 60 percent of park operations. Camping and lodging facilities brought in over 40 percent of these revenues, and park events, programs and activities brought in about 30 percent.

Arkansas parks have no entry fees, they were initiated in 1994 but quickly rescinded. Campsites range in price from $5 to $15 per site per night depending upon amenities and there is a 50 percent discount during the winter months. Cabins and lodge rooms range from $45 to $110. To encourage mid-week business, Sunday through Wednesday stays are discounted to four days for the price of three. A few of the parks have resorts with complete accommodations, including tennis courts and golf courses. Green fees range from $11 to $12 for 18 holes.

Numerous activities are available in the parks, many require a fee; interpretive barge tours cost $5 per adult, $2.50 for children; walking tours are $6.50 per adult, $3.25 per child; and canoe and float trips begin at $4 per person. Pedal boats, canoes, fishing boats and motor boats are available. Boat rentals range from $6 to $30 per day and marina slips can be rented for $5 a day or $35 to $60 per month. Museum fees range from $1.50 to $7 per adult, $1 to $4.50 per child and pools charge a standard $2 per person per day.

Park revenues are retained in a cash fund for exclusive park use, but legislative appropriation is required for all park spending. The bulk of Arkansas state park revenues are generated from park run facilities and activities.

To further raise revenues in light of decreasing general funding the Department of Parks and Tourism has begun partnership programs, working with corporate sponsors, and creating various interpretive tours such as "Wild Outdoor Woman (WOW)" , "Eagles Et Cetera" and "Bat-o-rama" eco-tours charging from $50 to $100 per person per day. The department has also initiated various running and bicycling competitions with entry fees from $10 to $20 per person. As Arkansas State Parks Director, Greg Butts said: "It's been an evolution, running things more like a business."

In 1996 a conservation amendment passed dedicating nearly half of a one-eighth of a percent sales tax for park use.(21) The dedicated funds are to be in addition to existing park funding, estimated to generate $18 million for parks in its first year. Day to day operations will receive 13 percent of the new park funding, with the remainder designated for capital expenses, major maintenance and land acquisition. Capital expenses are estimated to equal $177 million over the next ten years.

Arkansas State Parks have been extraordinarily innovative in user fee generation. The new dedicated taxes will enhance expenditures for park operations, but also help defray critical capital costs.

West Virginia's park system contains 52 units encompassing almost 200,000 acres. It attracts approximately 9 million visitors a year. Since 1980, park revenues have accounted for nearly 60 percent of the system's operating budget, with general funds and lottery receipts making up the rest of the budget.(22) In the last few years park revenues have accounted for an even greater share of the operating budget. In 1995, the parks collected fees nearly $15 million or 62 percent of the operating budget.

Interestingly, West Virginia parks do not rely heavily on entrance fees, which at $1 per vehicle, totaled only $19,095 in 1995. The lions share of revenue comes from camping and lodging fees. District Administrator Doug Baker says that the revenue increase in recent years cannot be attributed to modest fee increases, but rather to increased overall advertising--especially at historically low use times of the year. For example, winter packages can be made quite attractive and thus increase visitation at a time of the year that was previously slow.

Savings have also been generated through staff and vehicle reductions, and energy audits at individual parks. Baker notes that the park system strives to become as efficient as possible and to generate as much revenue as possible. Most importantly, park revenues are retained in a park fund with spending controlled by the Department of Parks and Recreation rather than the legislature.

The parks are about two years behind in capital maintenance needs. Each park has a five year maintenance plan with an estimated $10 to $15 million in capital projects. The parks have been allotted some lottery proceeds to address infrastructure repair and maintenance needs.

The New Hampshire state park system encompasses over 50,000 acres of land for public recreation. It includes 42 state parks, 12 historic sites and 6,000 miles of trails that attract more than 1.2 million visitors a year.(23) Natural areas within the system are nationally recognized with several sites listed on the National Register of Natural Landmarks. In addition, most of its historic sites are either National Historic Landmarks or on the National Register of Historic Places.

New Hampshire has been a pioneer when it comes to operating self-sufficient parks. In April 1991, amidst a growing general fund crisis, the state legislature passed an act requiring the park system to finance its operating budget through internally generated funds. The change in funding was cushioned by the fact that park income had actually exceeded operating expenditures for the three prior years. However, park receipts were handed over to the state treasury, breaking the direct link between money earned and money spent. It is this link that provides a critical incentive for park managers (Lapage 1995, 29). The 1991 act restored that link by establishing a park fund to receive park earnings. The fund is dedicated to parks, and monies are carried over from year to year. This funding structure provides assurance to park personnel that the money is available to the parks and is also an incentive for them to maximize revenues. Innovation has been key to New Hampshire's success at earning a large portion of its operating budget. It was the first park system to implement differential pricing for campsites, taking into account the level of amenities and popularity of a site. In addition, it was one of the first park systems to institute per-person entrance fees. As of 1996, prices for campsites ranged from $12 to $30 and entrance fees were $2.50 per adult. The annual pass to all state parks is $35. Children twelve years and under and resident adults over sixty-five are admitted free. Non-resident seniors pay $35 for an annual pass.

Adjusting user fees was just one way to help achieve self-sufficiency. The relatively small size of the park system requires that it experiment with a variety of approaches, according to Wilbur LaPage, former Director of the New Hampshire Division of Parks and Recreation. For example, the parks have an extensive donor program and an ever growing system of partnerships with companies (LaPage 1995), both of which have proved highly valuable. In 1992, volunteers contributed $2.8 million in labor and private funds.

A prime example of partnership success is the recent agreement with PepsiCo. Through a competitive bid process, New Hampshire offered exclusive rights for five years to sell soft-drink and related beverage in all the state parks. PepsiCo won the bid with a commitment to fund an education and awareness program for the state parks. One result has been an album of songs about New Hampshire and its parks and a concert series highlighting these songs. Another result of the program has been a collection of park activity books featuring Chumley Chipmunk. Chumley also visits parks promoting safety and environmental education. None of these products or events would have been affordable without the partnership with PepsiCo.

The ability of New Hampshire parks to consistently fund themselves operationally has meant that some capital costs have been moved over to parks for internal funding. Allison McLain, Director of Recreation Services, says the current backlog of park maintenance and capital projects maintenance is manageable, averaging approximately $333,000 per park, but growing.

Table 28. Statistics on New Hampshire State Parks

Budget

Acres*

Visits*

Receipts*

Operating*

Capital*

Total*

FY 1980

70

3,662**

$ 2,245

$ 3,721

$ 5,555

$ 9,276

FY 1995

75

1,178**

4,933

4,933

2,055

6,988

*In Thousands of $

**A change in visitor count now underestimates total total park visitation by counting only fee paying visitors. Those underage, resident senior citizens, off-season visitors or visitors of one of the few primitive parks in the system, are no longer counted.

Like it's neighbor, Vermont too has established an impressive record of self-sufficiency for its parks. The 64,000-acre park system comprised of 33 parks and 14 forests is enjoyed by nearly 900,000 visitors annually. And since 1993, operations have been entirely funded out of park user fees and other state-owned facilities that generate revenue for parks. This is a significant change from 1980 when nearly 40 percent of the operating budget was covered by general appropriations.

Increased fees, downsizing, and marketing have been instrumental in helping the parks reach self-sufficiency. Vermont charges a per-person entrance fee of $2.00 per adult and $1.50 for children ages four through thirteen. Children age three and under are admitted free. Senior citizens and disabled persons presenting a Green Mountain Passport are also admitted free (there is no charge for the passport but it must be obtained prior to park visit). The annual pass to all parks is $75 and camping fees range from $11 to $17.

The park also relies on so-called profit centers at state-owned facilities other than parks, in this case seven ski areas. The ski concessions yield an average of 8 to 12 percent of their gross receipts to the parks and provide 45 to 50 percent of the operating funds for the park system. Park entrance and other fees cover the remainder.

All revenues are placed in a park fund, with a portion set aside in a special revolving fund for periods of poor weather when revenues are low or when major maintenance is needed. One advantage of the revolving fund has been the ability of the parks to make capital improvements, currently estimated at $2 million. For example, the Department of Fish, Parks, and Recreation spent six years trying to obtain funds to renovate a deteriorating bathhouse at Emerald Lake State Park. The state health department then declared that it would not certify the facility without proper improvements. Ultimately, it was money from the revolving fund that was used to completely rebuild the bathhouse.

Even so, the parks have accrued a $2 million backlog in deferred maintenance needs. Addressing capital expenditures is the only source of tax dollars that reach the parks. But the legislated capital budget falls short of meeting these needs.

In a poll of state park directors, the Conservation Foundation found the top three concerns of directors to be issues related to the lack of funding (Myers and Green, 1989). State governments face ever increasing demands on their resources, which has been coupled with renewed demands for fiscal responsibility. In this situation, state parks have often been one of the first government agencies to feel the crunch.

Although parks are often credited for reduced crime and boosts to local economies, they have not been able to compete with other social needs for general funding. As a result, our parks have often been sacrificed.

The varied funding ideas and programs, both old and new, of the park systems across the country provide a valuable laboratory of ideas that can be used to plan for future park management. General fund appropriations will not likely increase in the future, and responsible park managers need to search for alternative revenues. It is imperative for the future of our parklands to provide a stable source of funding that will enable park managers to not only do their jobs in a responsible manner, but to perform at the highest possible level to protect and enrich our parks.

Many examples show promise. Corporate sponsorships, volunteers, and "friends" groups are not new ideas, but show renewed potential when given proper innovations. Per person entry fees rather than per vehicle fees have been successfully implemented in New Hampshire, Vermont, South Dakota, and Texas to generate additional fee revenues. Other user fees for various special uses such as environmental interpretation programs have raised much needed revenues at many parks. Increased fee collection efficiency can substantially raise park revenues as in Nebraska. In 1994 fees were collected from all Nebraska parks more than doubling the entrance fee revenues from 1980 when just over half the park units charged entry fees. Parks where it is not cost-effective to have permanent fee collection staff on site in all units could sell day-use permits via mail or thru nearby convenience stores or gas stations. Enforcement mechanisms can include random checks with fines for violations similar to checks for valid hunting and fishing licenses.

Other examples include flexible pricing to reflect variable demands for different parks and services, and central reservation systems for camping. Both have helped parks not only raise additional revenues, but also disperse congestion and enhance visitation to previously under utilized sites. In Texas, 30 percent of the visitors who could not reserve their first choice campground, agreed to an alternative within the park system when offered the option.

Allowing bids on commercial use permits and concessions has helped defray park administration costs and provide quality guest services. While states such as Vermont have found off-site concessions to be great revenue generators,(24) others states such as Alabama and Arkansas have found park-run concessions to generate both revenue and cost savings.

Texas provides one of the most striking illustrations of institutional reforms to ensure the future financial stability of its parks. Thus far, incentive changes for park managers have led to increased revenue and cost savings, and yet not limited the ability of the average Texan to enjoy the parks. Flexible pricing to reflect seasonal and locational demand shifts, per-person charges (that are still less than the price of a movie), and high-end services that cater to those willing and able to pay for them allow the market to work and yet benefit the resources themselves.

On the capital side, the picture is not so rosy. Dedicated funds, such as Colorado's GOCO dollars, have kept some parks out of trouble. But dedicated funds are not the panacea they appear to be. They are susceptible to political maneuvering and are a target for politicians looking for money as occured in Oregon. In three of the five state park systems that have relied heavily on dedicated funds, the source has declined or been eliminated as budgets have gotten tight.(25) Bond referendum and certificates of participation have taken care of portions of park maintenance backlogs, but aren't sufficient to consistently maintain capital expenditures. This picture could change if more park systems became operationally self-sufficient thereby freeing up more tax money for capital budgets.

As an added boost to capital budgets, PERC recommends the establishment of a park endowment funds for capital improvements and repairs. Annual contributions could come as a percentage of revenues in excess of operating costs, donations, and sale of corporate sponsorship rights like those in New Hampshire parks. The fund could invest in liquid instruments such as high quality stocks and bond funds to achieve an acceptable rate of return. Interest from the fund could be used to fund annual repair, renovation, and construction. Such a fund would be under total park agency control with interest to be spent at agency discretion.

One of the common arguments against the user supported parks is that public parks were created for public use--for all to enjoy for free. In times of prosperity, adequate surplus money may have enabled such a noble objective to occur in some states. In energy rich states like Wyoming, Texas, and Alaska, that was most certainly the case. Today, it is obvious that new fiscal economic realities warrant change. Free or below-cost user fees, and the dwindling size of general fund coffers have simply not been able to support the proper management of our parks and certainly will not be able to meet their future needs. Parks can move forward with changes, learn from other programs, and lead the way with their own innovative ideas, or they can maintain the status quo and watch their systems decline and fail. As the more self-sufficient parks demonstrate, such change does not necessitate the sacrifice of parks' original mission of protecting historical, cultural, and natural resources. What is apparent from the historical reliance on general funds, however, is that parks cannot be managed properly when personnel are uncertain if they will have a job the following year, and park facilities and resources are allowed to become so debilitated that it is difficult to attract visitors.

12. Determined by assuming four persons per vehicle with 1995 visitation at 4.6 million and an entry fee of $3 per vehicle.

13. Unless otherwise cited, information in this section was gathered in a April 1, 1996, phone interview with Dorothy Streyle, Business Manager, North Dakota.

14. Unless otherwise cited, information in this section was gathered in a February 1, 1996, phone interview with South Dakota State Parks Concessions Operations Manager Bob Schneider and September 9, 1996, with Marty DeWitt, Supervisor of Visitor Services South Dakota Division of parks and Recreation.

21. Unless otherwise cited, information in this section was gathered in a September and November, 1996, phone interviews with Greg Butts, Park Director, Arkansas State Parks and Recreation.

22. Unless otherwise cited, information in this section was gathered in February and November, 1996, phone interviews with West Virginia State Parks District Administrator Doug Baker.

23. The term park is used in a general sense. There are several types of parks in the system. They include state parks with extensive visitor facilities, state beaches, natural areas, wayside parks, historic sites, and mountain parks.

24. Note, all data from park-run concessions are in gross terms, the cost of running the concessions is not reported.

25. As presented, Oregon, once fully dependent upon dedicated funds, now receives only 40 percent of its operating budget from dedicated sources. And half of Kentucky's budget was supported by dedicated funds in 1980, but none were allotted in 1995. Montana, on the other hand has increased dedicated fund dependence. Not discussed, Florida relied on 100 percent dedicated fund support in 1980, but receives less than 50 percent of their operating budget in dedicated funds now. And Missouri relies almost entirely on a dedicated sales tax, but even their funding has dropped from 93 percent of operating expenditures in 1995 to 87 percent in 1995.

Leal's research on natural resources and environmental issues spans nearly 20 years. His current focus is on preventing over-harvesting of marine resources and restoring ocean fisheries.Leal is working to build support for individual fishing quotas (IFQs) and fishing cooperatives as more effective alternatives to the current regulatory approach...

Holly Fretwell is a Research Fellow at PERC and an adjunct instructor at Montana State University where she has taught introductory economics, macroeconomics, natural resources and environmental economics. She works with the Foundation for Teaching Economics, giving workshops for high school teachers to improve their skills in teaching and...

Founded 30 years ago in Bozeman, Montana, PERC—the Property and Environment Research Center—is the nation’s oldest and largest institute dedicated to improving environmental quality through property rights and markets.

The goal of PERC’s programs is to fully realize the vision of establishing “PERC University,” where scholars, students, policy makers, and others convene to expand the applications of free market environmentalism.

PERC's fellowships share a common goal of exposing new scholars, students, journalists, and policy makers to free market environmentalism, as well as enable scholars already familiar with FME to explore new applications.